Most of us would have heard at least one horror story about a will dispute. Some of us have even gone through it before and will know that these types of disputes can get ugly and at times even break families apart.
What you might not know is that in a lot of instances the dispute could have been avoided with appropriate estate planning advice at the time of making the will. When you choose a specialist lawyer to assist you with preparing your will they can properly assess potential disputes and put in place strategies to minimise the risks.
In this article, I share insights from my experience as a specialist estate planning lawyer into the more common disputes that arise and how you can look to avoid them.
Common types of estate disputes
Perhaps the most common dispute arises in circumstances where the will does not make adequate provision for certain beneficiaries who are eligible to make a claim against the estate under relevant family provision legislation. These claims are particularly prevalent where there is a blended family. Whilst it is not always possible to avoid a claim being made, with appropriate planning it is possible to minimise the risk. Being aware of who is eligible to make a claim; having knowledge of the financial position of potential claimants; having an appreciation of the likely outcome of a potential claim; and getting advice on how to address the risk is critical at the time of making the will. Not all assets are estate assets. For example, assets held as joint tenants; superannuation; and trust assets will not necessarily fall into the estate and it may be possible for the will maker to organise their affairs so as to reduce the size of their estate. Different considerations and strategies to minimise risk will apply depending upon where assets are located. There are particular issues for assets which are located in NSW. Family provision claims are costly and will far outweigh the cost of obtaining expert advice at the outset.
One type of dispute that we see regularly involves co-executors who don’t see eye to eye and are unable to reach agreement on a range of issues relating to the administration of the estate. This is particularly the case where the executors are related (often siblings) and are also beneficiaries. Parents often feel that they need to appoint all, or more than one of their children as executors so as not to be seen as favouring one child over another. In some cases they appoint more than one child even when they are aware of an existing conflict between them. Asking the right questions at the outset about the family dynamics and explaining the role and obligations of being an executor will often head this potential problem off at the pass.
We are often faced with disputes as to the validity of a will on the grounds of the cognitive capacity of the willmaker at the time that the will was made. Such disputes can often be avoided if the person preparing the will (often a solicitor) ensures that appropriate steps are taken to assess the capacity of the willmaker. If the will maker does not have capacity then it may be appropriate to make an application to the court for a statutory will.
Other disputes have their genesis in poorly drafted wills which contain ambiguities which may require the Court to either interpret (construe) the will or in appropriate circumstances to rectify the defect in the will. Again disputes of this kind can be avoided if expert advice is taken at the time of the will being made.
Executors behaving badly
Disputes can also arise where the executor is either tardy in getting a grant of probate and administering the estate or fails to administer the estate in accordance with the provisions of the will. Problems in this area are often exacerbated where the executor is also a beneficiary and conflicts of interest arise between their role and obligations as executor and their interest as a beneficiary. There are a range of remedies available to beneficiaries who are impacted as a result of an executor behaving badly. Ultimately, the Court has the power to remove an executor and to appoint someone else to administer the estate. This can come about by agreement between the interested parties or by order of the Court following a contested hearing. I have recently been appointed by the Court to administer 2 estates in cases where the original executors could not agree about fundamental issues in the administration of the estate and as a result the process had stalled. In both cases the executors were siblings who did not get on. Sensibly, in both cases they reached an agreement to all step down and appoint an independent administrator. As mentioned earlier this situation might have been avoided with better planning at the outset.
How to minimise the risk of disputes
The best way to minimise the risk of an estate dispute is to consult a specialist wills and estates lawyer at the outset. Our team will be able to direct you and tell you of the likely instances of what could go wrong and what it could lead to if you do not get it right. This will help you to make wise choices and reduce the risk of conflict arising after you have passed away.
The DDCS wills and estate planning team are highly experienced and specialise in helping people navigate issues like these. To discuss your circumstances, phone our team on (02) 62127600 or fill in the contact us form and our team will be in touch.